Costs of freelancing to soar, freelancers warn

Under its Freelancer Confidence Index published
yesterday, freelance body IPSE said that between April and June, the chunk of
freelancers predicting higher costs for their business leapt to an unprecedented
92 per cent.

“It is likely that the biggest factor behind this is
the increase in the cost of imported goods and services following the post-Brexit
drop in the value of sterling,” IPSE wrote, in a report on the index.

The one bright spot about costs, it seems, is that
when asked, “input costs” was not one of the top three factors that played a
part in what the
report calls a “significant decline” in the freelancers’ business performance.

However, reading between the lines of why freelancers’
confidence in their performance is so low (only 19% were positive for Q3), IPSE
said it may be “because of their expectation that higher business costs will
squeeze profit margins.”

In the report, the extent to which freelancers predict
the price tag of doing business to inflate does not feature, but it does say
which type of freelancers are most expectant of increases.

In fact, almost all freelance managers, directors and
senior officials are planning for hikes in the prices they pay, as are the vast
majority of technical freelancers and those working at associate professional
level.

Freelancers trained to at least degree level and who
work in professional sectors like Research, Business or Media were the
least likely to anticipate their costs going up.

But only marginally more so -- more than eight in
10 of this less affected group still said they foresee extra expense for their freelance business.

“Unlike
employees, freelancers are responsible for purchasing the goods and services
that enable their businesses to run,” the Association of Independent
Professionals and the Self-Employed (IPSE) said.

“Day rates have hit a peak of £525, which shows the
considerable earning power of freelancers compared to employees. However, if inflation continues to
climb, it will erode earnings right across the sector."